E BUSINESS STRATEGY

E Business Strategy

Executive Summary

The purpose of this business plan will be to support a request for a $10,000, three-year bank loan as part of the financing for a start-up sole proprietorship, BulldogMall.com. The e-business will be owned by Jim P. Pappas and will be located in the owner's residence. The owner will provide a minimum of $20,000 in initial equity. This paper will set out to discuss the development of an e-business strategy by a UK soft drinks company. It is based within the Fast Moving Consumer Goods (FMCG) sector (also known as Consumer Packaged Goods), which is characterised by powerful retailers, tier-1 suppliers of industrial end-products and ingredient/raw material producers further upstream. The paper will aim to examine the tensions created at tier-1 level relating to the adoption of e-business solutions for B2B activities. The work has significant implications for the development of Princes' e-business strategy, and - by extrapolation - for other companies operating in similar commercial environments.

Chapter 1: Introduction

Electronic commerce (e-commerce) refers to the conducting of business transactions over electronic/computer networks, including the internet, (Barnes and Hunt, 2001) and therefore encompasses processes related to the buying, selling and trading of products, services and information, (Gunasekaran et al., 2002). There has been considerable publicity given to the use of e-commerce in business-to-consumer (B2C) markets, where transactions involving such activities as ordering goods, personal banking and share trading are becoming increasingly commonplace. However, the use of e-commerce for business-to-business (B2B) transactions has been widely identified as an area with significant potential for cost saving and future revenue generation (Barnes and Hunt, 2001). For businesses, B2B can mean electronic interaction with members of the supply base, i.e. for inbound procurement, and with customers for transactions relating to their procurement activity.

In the current business environment the adoption of e-commerce is seemingly unavoidable - “ … e-commerce is no longer an alternative, but an imperative. [However] many companies are struggling with the most basic problem: what is the best approach for establishing and doing business in the digital economy?” (Lee, 2001, p. 349). This suggests that, in moving into an e-commerce business environment - over which there is little choice - there is a need to develop an e-business strategy that will inform and direct future operations. Lee goes on to argue that in addressing this problem, there is no simple prescription or established business model for companies or industries and that developing an e-capability often entails making a paradigm shift, radically altering traditional approaches to doing business (Lee, 2001). It follows that the development of an e-business strategy is uniquely challenging and essential. Such a strategy should concern not only the appropriate technology choices of tools and solutions, but also the coherence and integration of these choices with other company processes (Cagliano et al., 2003) and with their wider strategy for supply chain management (Smart and Harrison, 2002). The empirical component of this paper - presented after theoretical background - explores the situation faced by Princes, a tier-1 supplier ...